Three short positions for a long/short ESG fund

Jack Lowenstein and James Tayler, portfolio manager and head of research of the Trium Morphic ESG L/S Fund, outline their three current top shorts.

Wells Fargo - Too big to succeed We used to own shares in Wells Fargo (WFC), one of the largest national banks in the US. Our thesis was simple: growing banks tend to keep growing and the sustainability of this phenomenon is under-priced by most investors. We sold when we felt WFC had reached its growth limits. Management was using increasingly tenuous accounting trickery to meet Wall Street estimates. We are now short Wells Fargo. In this case, senior bank management had become convinced that the best growth opportunity was for WFC to sell more products to its existing client base. E...